The top two executives at taxpayer-funded Scottish Enterprise last year saw the accumulated total value of their pensions surge £400,000 to almost £1.5m.

The top two executives at taxpayer-funded Scottish Enterprise last year saw the accumulated total value of their pensions surge £400,000 to almost £1.5m, with only £21,000 of the increase coming from their own contributions, it emerged yesterday.

The latest annual report of the economic and business development quango revealed the boost to the pension values of chief executive Jack Perry and Lena Wilson, chief operating officer of Scottish Enterprise, at a time when many companies are terminating such schemes or seeking greater contributions from their employees.

Last year, Royal Mail attempted to enforce the closure of its final salary scheme to new entrants, instigating a national postal strike, and earlier this year oil workers at Grangemouth caused major fuel supply disruptions after refinery owner Ineos also threatened to close its final salary pension scheme.

Scottish Enterprise committed the extra funds in the wake of a redundancy programme and a major restructuring - hailed by Perry as "a model for the reform of the public sector" - which signalled a radical shift in emphasis away from local business support, now in the hands of local authori- ties, towards investment in Scotland's high-growth companies and priority industries.

According to the agency's 2007-08 annual report, Perry, who is also a former Ernst & Young partner and was CBI Scotland chairman, saw the cash-equivalent transfer value of his pension rise from £575,000 to £777,000 during the year to March 31. The report states the increase, excluding Perry's contribution, was £190,000.

Not too far behind, Perry's second-in-command Wilson, who earlier this year was also appointed into the dual position of chief executive of inward investment and export promotion agency Scottish Development Inter- national, saw the cash-equivalent transfer value of her pension catapult from £471,000 to £667,000 during the year to the end of March after Scottish Enterprise "funded" an increase worth £187,000.

The annual report, which was published yesterday, notes: "The cash equivalent transfer value is the actuarially assessed value of the pension scheme benefits accrued by a member at a point in time. The benefits valued are the member's accrued benefits.

"It represents a payment made by a pension scheme to secure benefits in another pension scheme or arrangement when a member leaves a scheme and chooses to transfer the benefits they have accrued in a former scheme throughout the total period of service."

It adds: "The increase in the cash equivalent transfer value is that funded by the employer, taking account of contributions paid by the member."

At the same time public sector veteran Wilson saw her pay package jump from £179,000 to £193,000, including a £17,000 bonus payment and further £9000 covering a car allowance and "other benefits".

Perry's pay packet climbed from £219,000 to £225,000, comprising a basic salary of £191,000, a bonus of £24,000, a car allowance and other benefits worth an extra £10,000.

Hugh Hall, Scottish Enterprise's finance director, also a member of the agency's final salary pension scheme, saw his total pay package rise to £159,000, including bonus and benefits. Hall last year replaced predecessor Iain Carmichael, who headed the finance function during its crisis-ridden 2005-06 financial year.

Final salary schemes, also known as defined benefit schemes, can be very generous. They pay staff a set percentage of their final salary depending on length of service.

However, according to recent research by the National Association of Pension Funds, the number of workers with access to a final salary pension scheme looks set to fall in the next five years.

Asked how Scottish Enterprise accounted for the sizable increases in pension contributions, Hall insisted: "These increases do not impact on the final pensions. Rather, they reflect actuarial calculations, What employees get at the end of the day is pre-determined and fixed by their salaries.

"The increases do not give an employee added pay-outs."

NAPF said that last year 31% of private sector final salary schemes remained open to new members, against a figure of 33% in 2006.

Many existing members of final-salary schemes have been asked by their employers to hike their own contributions to preserve the previously-agreed level of benefits.

Asked if the increase in the value of Scottish Enterprise executives' pensions was viewed as fair, given the state of affairs in the private sector, Hall said: "Like the rest of the public sector, Scottish Enterprise continues to operate a final salary pension scheme and we have no intention of changing that."

Meanwhile, the annual report also revealed that agency veteran Charlie Woods, who retired under a voluntary severance scheme last year which was aimed at staff in senior management positions and saw 39 staff leave their posts, saw his pension pot hit £720,000 on July 2, 2007 - the date of his retirement - after Scottish Enterprise-funded contributions of £108,000 last year.

In a note contained in the report's pensions section, it emerges that Woods was paid a further £30,000 for "compensation for loss of office" and a further £5502 for accrued holiday pay.

Asked why Woods was paid compensation after taking part in a voluntary severance scheme, Hall said: "The term loss of office is a bit of a misnomer. It really relates to the fact that he took early retirement."

Meanwhile, as part of the reorganisation, the hiving-off of the skills and training function Careers Scotland meant 1200 employees transferred out while 260 took voluntary redundancy, leaving Scottish Enterprise with 1050 staff.

Scottish Enterprise's annual budget will also be cut from £329m to £283m over the next three years, of which £15m will be savings from lower overheads. The quango's current budget is £297m.

The annual report also reveals that Scottish Enterprise achieved all performance measures within budget during a year in which it said it had "been operating in a challenging economic environment".

It also noted that it supported the" highest ever number of business start-ups through Business Gateway as well as far exceeding our forecasts for supporting Scottish companies to access new overseas markets and in attracting new inward investment to Scotland".

Significant progress was made in "some of our high impact projects that will help support the development of Scotland's key industries, including Edinburgh BioQuarter, the Digital Media Quarter at Pacific Quay and the launch of the Energetica," it added.